Understanding and Calculating Different Types of Earnings

A complete set of vocabulary flashcards covering employee compensation, various salary types, overtime calculations, and common deductions in the Philippines.

EMPLOYEE COMPENSATION

The total payment or benefits an employee receives in exchange for their work or services, including salary, wages, and financial/non-financial benefits.

FINANCIAL BENEFITS

Monetary rewards provided by the employer such as salary, bonuses, overtime pay, commission, and contributions to health or retirement plans.

NON-FINANCIAL BENEFITS

Non-monetary perks like flexible hours, training, recognition, and wellness programs that enhance employee satisfaction.

PAYROLL

The total amount of money a company pays to its employees, including wages, salaries, bonuses, and deductions.

GROSS PAY

The total amount of an employee’s earnings before any deductions have been made by the employer.

NET PAY

Also known as take-home money, it is the amount left after all deductions are subtracted from gross pay.

WAGE

Irregular monetary compensation paid for work done based on time, task, piece, or commission, usually paid daily or hourly.

HOURLY WAGE

The specific amount an employee earns for each hour worked.

DAILY WAGE

The amount earned for each day worked, which does not include payment for days not worked like rest days or holidays.

SALARY

Fixed regular wage typically paid monthly, semi-monthly, or weekly for professional, managerial, or administrative positions.

ANNUAL SALARY

The total amount of money a person earns in one year.

SEMI-MONTHLY SALARY

The amount earned twice a month at intervals not exceeding $16$ days, computed as $\frac{\text{Annual Salary}}{24}$ or $\frac{\text{Monthly Salary}}{2}$.

BI-WEEKLY SALARY

Income received every two weeks, calculated as $\frac{\text{Annual Salary}}{26}$.

WEEKLY SALARY

The income received in a week, calculated as $\frac{\text{Annual Salary}}{52}$ or $\text{Daily Wage} \times 6\text{ days}$.

OVERTIME PAY

Extra pay given for working beyond $8\text{ hours}$ at a specific rate relative to the regular wage.

Work on a Rest Day or Special Holiday rate

Calculated by multiplying the daily rate by $130\%$.

Work on a Regular Holiday rate

Calculated by multiplying the daily rate by $200\%$.

Work on a Regular Holiday that falls on a Rest Day rate

Calculated by multiplying the daily rate by $260\%$.

NIGHT SHIFT DIFFERENTIAL

An additional amount calculated by multiplying the applicable rate by $110\%$ for work performed between $10:00\text{ pm}$ and $6:00\text{ am}$.

COMMISSION INCOME

Earnings derived from a percentage of sales made, which can be pure or combined with a base salary.

PIECEWORK EARNINGS

Earnings based on the number of specific items or products completed, such as pieces of clothing or baskets of fruit.

DEDUCTIONS

Amounts subtracted from gross pay due to law or agreement, such as taxes, insurance, or loan payments.

SOCIAL SECURITY SYSTEM (SSS)

Mandatory for private sector employees, providing benefits for retirement and disability at a rate of $5\%$ of monthly salary, capped at $₱1,750$.

GOVERNMENT SERVICE INSURANCE SYSTEM (GSIS)

Applicable to government employees only, providing life insurance and retirement benefits at a rate of $9\%$ of the monthly salary.

PAG-IBIG FUND

A mandatory savings and housing loan program for all employees with a rate of $2\%$ of monthly salary, capped at $₱200$.

PHILHEALTH

Health benefits and hospitalization coverage for all employees with a rate of $2.5\%$ of monthly salary, based on a $₱100,000$ ceiling.

WITHHOLDING TAX (BIR)

Income tax collected in advance by the employer to support government services, governed by the Tax Reform for Acceleration and Inclusion Law.